How China Can Respond To Trump’s Tariff War

In the trade war against China, the White House’s “America First” advocates are relying on trade instruments that contained Japan’s rise in the 1980s. But China is not Japan. It has ten ways to hit back.

On Tuesday, China said it would impose anti-dumping duties on imports of U.S. sorghum. As the largest buyer of U. sorghum – about $1 billion annually – China holds substantial leverage. Currently, China relies almost solely on the US for its sorghum. As bilateral trade relations erode, that kind of reliance may soon be a thing of the past.

Moreover, since sorghum is grown mainly in rural US South, the measure will penalize those Trump constituencies that supported his 2016 triumph. In the fall, their support will no longer be given in the midterm election.

How to subvert half a century of free trade in five weeks

Here’s how President Trump undermined five decades of freer trading in five weeks. In early March, he introduced a global tariff of 24 percent on steel imports, while launching a 10 percent duty on all aluminum entering the US.

On March 22, Trump directed his administration to make a case against Chinese technology licensing in the WTO, launched a slate of tariffs at $50 billion on Chinese products and proposed to step up restrictions on Chinese investment in key US technologies. That’s when China, in response to US steel and aluminum tariffs, imposed tariffs on $3 billion worth of US goods.

On April 2, China imposed tariffs of up to 25 percent on 128 US products, in response to steel and aluminum tariffs. The next day, the US proposed tariffs on $50 billion worth of Chinese electronics. Afterwards, China launched $50 billion in tariffs on more US products, including soybeans, cars and chemicals. And on April 5, Trump said he was considering an additional $100 billion in tariffs against China.

In the colonial era, Britain relied on the “divide and rule” principle to exhaust rivals and sustain its power. With substantial geopolitical leeway, Trump is playing targeted countries against each other. That’s why he granted “initial exemptions” to US NAFTA partners, Mexico and Canada, “temporary exemptions” to the EU, South Korea and others on steel and aluminum tariffs.